Brunei Darussalam: Scaling up small industry

Brunei Darussalam is stepping up efforts to promote private sector industrial development as part of a wider programme to diversify the economy, though limited availability of land and skills shortages in some areas may slow progress.

Increasing the scope of local industry has long been a goal of the government. Though Wawasan 2035 – the social and economic blueprint laid out by the state to guide the Sultanate’s long-term development – emphasises the building of a knowledge-based society and reducing dependence on the hydrocarbons sector, the plan also calls for the expansion of Brunei Darussalam’s industrial capacity.

While much of the focus on developing this industrial capacity has been directed towards large-scale, state-backed initiatives such as the Sungai Liang Industrial Park, the Brunei Methanol Company and the port at Pulau Muara Besar, small and medium- sized enterprises (SMEs) are also being targeted.

One of the lead agencies supporting SMEs is the Brunei Industrial Development Authority (BINA), part of the Ministry of Industry and Primary Resources. BINA has been involved in the development of 10 industrial sites in districts across the country, overseeing the provision of infrastructure and services, with one of its newest projects being the construction of a building at the Batu Apoi industrial site to house local SMEs. Work on the $800,000 development is scheduled to commence in August, after consultations with local SMEs and cooperatives in the eastern Temburong district.

The acting director of BINA, Metassan Hj Abd Salim, said that the 5-ha industrial park has been subdivided into 15 blocks that could be developed by private firms, and that rental charges had been set low to encourage companies to utilise the site. The project was part of a wider government strategy to promote SME industrial development, he said in late March.

“The government plans to have industrial sites in each district to ensure that SMEs can take advantage of the facilities to conduct their business,” said Metassan. “The Batu Apoi industrial site is also provided for that purpose.”

Though BINA is working to provide access to industrial sites for SMEs, a wider shortage of land remains a challenge to development in the sector. With large swathes of Brunei Darussalam’s territory set aside as nature reserves, and the Sultanate’s growing urban areas also swallowing more land, there are constraints on where industrial ventures can be sited.

While it may not be possible to increase the total amount of land, the country is attempting to use the available space in the best possible manner. In mid-March, the Centre for Strategic and Policy Studies (CSPS), a state-funded think tank and research organisation, announced it had signed an agreement with Australian consultancy firm SGS Economics and Planning to prepare a long-term plan to help maximise industrial and commercial development on the land available for such purposes.

“The purpose of the study is to project industrial and commercial land use requirements for achieving and maintaining economic diversification for Brunei over a long-term period of up to 2035 and beyond,” Dato Paduka Hj Murni Hj Mohamed, the chairman of the CSPS, said.

In a statement issued to mark the signing of the accord, SGC said that using best practices in land use planning was crucial for economic diversification and in attracting foreign direct investment (FDI).

“Among the many strategies that countries like Brunei can pursue to attract and facilitate FDI is the provision and promotion of appropriately zoned and located land and infrastructure for new industry,” the statement said. “The strategy will focus primarily on the promotion of Brunei’s land and associated infrastructure assets to accommodate new investment.”

Another factor holding back the development of the nation’s industries is a shortage of workers, despite the fact that Brunei Darussalam has up to 7000 people registered as unemployed. According to Pehin Kapitan Lela Diraja Dato Paduka Goh King Chin, a member of the Legislative Council (LegCo), one way of reducing unemployment while bolstering the local manufacturing sector is to further develop the national skills base.

With limits on how many jobseekers the public sector can absorb, it is essential that efforts be made to meet the labour needs of the private sector industries the government is trying to encourage, he said in an address to the LegCo in mid-March.

“We need to have a proper strategy to encourage FDI to create new industries here,” Pehin Dato Goh said. “We must therefore have enough skilled and able workers. However at present, we face a serious shortage of skilled workers available to work in the private sector. At the same time, we also have quite a high unemployment situation.”

The Ministry of Education is moving to address the issue, looking to increase the number of schools providing training in trades and the number of students that can be admitted to existing facilities. Though it will take time for the next generation of skilled workers to make their way into the job market, by the time they graduate the country should have a well-developed plan in place for utilising industrial land, as well as the necessary framework to support new ventures, especially SMEs.